The budget pact advancing on Capitol Hill reflects, as yet, no sign that Congress or President Trump grasp the intertwined nature and scale of the crises that confront America. The crisis of debt is seen in the surging level of federal red ink, exceeding $36 trillion and growing. What enables that debt is a monetary crisis that erupted in 1971 when America left the gold exchange standard to enter the era of fiat money. Neither crisis arose — or can be solved — on its own.

That’s not to say there’s a lack of points to appreciate in the “one, big, beautiful bill” that Republicans are pushing on the Hill. Preserving Mr. Trump’s tax cuts would foster growth. Yet the solons appear to be dodging the spending cuts that are needed to bring the budget into balance and avoid further expansion of the federal debt. “You watch,” Congressman Thomas Massie warns. “Next year, we’ll spend more money than we did this year.”

This failure to take seriously the threat posed by the soaring national spending is not only fiscally irresponsible. It is enabled by fiat money — and threatens America’s freedom of action. The most recent signal emerged Wednesday amid fears that the vast scale of the debt was constraining Mr. Trump’s ability to impose his “Liberation Day” promise of reciprocal tariffs. The debt markets, in effect, telegraphed that America couldn’t afford the policy shift.

If that wasn’t enough to wake up the Congress to the debt threat, what would be? Yet far from moving to close the yawning deficits, the Republicans’ budget bill is proposing to increase the federal debt ceiling by some $5 trillion. That would send the national debt north of $40 trillion. With America’s debt already exceeding the gross domestic product by some 20 percent, the profligacy envisioned by Republicans is just shocking. 

The debt was $412 billion, or a little more than a third of GDP when, in 1971, President Nixon closed the gold window and ushered America into the age of fiat currency. The abandonment of gold convertibility set in motion the debt and monetary crises. The dollar’s convertibility into gold at the rate of a 35th of an ounce had served as a brake on federal spending and borrowing. As the gold value of the dollar plunged, the debt began its surge.

The dollar’s current value in gold — the historic basis of monetary value — is less than a 3,100th of an ounce. So it is that as the debt soars to unprecedented heights, America anticipates repaying its credits with dollars that are worth but a small fraction of the value they held at the time the dollars were lent to the government. It’s no wonder that borrowing costs for long-term federal debt are rising in bond markets, as doubts grow over federal creditworthiness.

Solving this two-headed problem will require Mr. Trump and the GOP not only to enact the spending cuts needed to bring the budget into balance, but to light up this issue in the Congress, to which the Constitution grants the monetary powers. A starting point could be the formation of a monetary commission like the one that followed the Panic of 1907. Its recommendations led to the creation of the Federal Reserve in 1913.

We’re not wedded to a commission per se. Yet someone serious needs to look at the Fed’s performance over the last 112 years, as well as how our experiment in fiat money has fared since 1971. A monetary commission was the institution proposed by GOP platforms in 2012, 2016, and 2020. It was a reminder of the Republican party’s association with a sound dollar. The idea would be to mark the role that debt and fiat money have played in today’s crisis.